- The prosperity is on the rise, and the performance of the photovoltaic sector is differentiated
- The energy transition is accelerating, and global policies are emerging frequently
- Strong demand for photovoltaic installations, and good competitive landscape for a long time
- Industrial chain: Stimulated demand, high operating rate of the industry
- Battery technologies full bloom, cost reduction and efficiency increase expect to exceed expectations
The lowest point of the photovoltaic industry index in 2022 occurred on April 26, 2022, with a retracement rate of 36.1%, after which the index has continued to run upwards.
1. The prosperity is on the rise, and the performance of the photovoltaic sector is differentiated
Since 2021, the global photovoltaic industry sector has fluctuated upwards. In 2022, the market demand will continue to rise, and the high prosperity of the medium and long-term photovoltaic industry sector will not decrease.
On the one hand, with the support of China's carbon neutrality and carbon peaking goal, the favorable policies such as large bases and county-wide promotion have gradually been realized. Affected by the events in Russia and Ukraine and the pressure of energy transition, the demand for installed capacity has continued to increase, and the industry's prosperity has remained high.
On the other hand, it is expected that with the release of new silicon material capacity in the second half of 2022, the pressure on the supply side is expected to gradually ease, and the fundamentals of the photovoltaic industry sector will be further improved. On the whole, the prosperity of the photovoltaic industry sector is relatively high, and it is expected to continue to be maintained in the future.
2. The energy transition is accelerating, and global policies are emerging frequently
① A number of policies to accelerate the dual carbon process
The strategic status of new energy has become increasingly prominent, and the intensive introduction of favorable policies has fully demonstrated China's determination and confidence in developing new energy. Recently, the Chinese government has set a target that the total installed capacity of wind power and solar power in China will reach more than 1.2 billion kilowatts by 2030, and the consumption of non-petrochemical energy will reach 20% by 2025.
② Renewable energy subsidy funds and special bonds provide financial guarantee for photovoltaic industry development
The Chinese government has introduced a guaranteed grid-connected project to support the ground-based power plant project in 2022. According to the data, in 2021, the guaranteed grid-connected photovoltaic industry projects announced by various provinces in China will reach 65.37GW. Assuming that the grid-connected rate is 1/3 in 22 years, the installed capacity of affordable projects will reach 21GW in 2022.
The Chinese government stated that it will issue 3.45 trillion special bonds this year, and will give priority to including new infrastructure and new energy projects in the scope of support. Construction of large-scale wind power photovoltaic industry bases to ensure the realization of the dual carbon goal.
③ Strong demand for installed capacity, accelerating pace of photovoltaic industry development
From the perspective of the global energy consumption structure, traditional energy still accounts for a large proportion of energy consumption and power supply, and there is a broad space for energy transformation and increment. From the energy consumption data in 2020, traditional energy is in the dominant position, accounting for 83.15%, of which oil accounts for 31.27%, natural gas accounts for 24.7%, and coal accounts for 27.18%.
New energy is in a secondary position, of which nuclear energy accounts for Compared with 4.3%, hydropower accounts for 6.85%, solar energy accounts for 1.36%, and other renewable energy accounts for 4.33%; from the perspective of power production energy, coal is the largest energy source for global power production, accounting for 36.66%; natural gas in second place, accounting for 23.47%; oil only accounted for 2.76%.
Nuclear energy, hydropower and solar photovoltaic industry as new energy accounted for 10.32%, 16.01% and 2.52% respectively. The rising cost of traditional energy drives the price of electricity to fluctuate upwards. The energy price level from January to April 2022 is 2.8673 times that of 2016 and 1.55 times that of the average level in 2021. After the Russia-Ukraine conflict, electricity prices in major countries around the world rose by an average of 68.48%.
PPA prices are in an upward channel, with strong installed demand North America and Europe, two key global PV installation markets, PPA quotations have been rising for a long time, and it is expected that demand will be strong and the module price will be highly accepted. Among them, the price of new energy PPA such as wind and solar in North America has risen steadily since 2020.
In 2022Q1, the price of photovoltaic industry PPA will increase by about 17% year-on-year, while the average PPA price in Europe will show a significant growth trend in 2021 and the momentum has not decreased so far, with a year-on-year increase of about 20%. %. In the context of regional disputes, energy security and energy independence are imminent.
In the context of the Russia-Ukraine incident, the EU's desire for energy security has become more and more urgent. Therefore, it is expected that photovoltaic industry in the EU are expected to usher in a period of rapid development as an important alternative energy source. The energy security proposition requires the EU's renewable energy target to continue to move upward. RePower EU proposes multiple initiatives to fully exploit the potential of PV installations.
- Limiting the permit period for rooftop solar to a maximum of three months;
- Adopting measures to ensure that solar energy can be installed in new buildings;
- After 2025, measures will be gradually taken to mandate that new buildings that meet the requirements will be or stock buildings to install solar energy.
Since 2015, coal-fired power generation in Germany has decreased year by year, but the proportion of natural gas, wind power, and photovoltaic industry power generation has increased. In addition, Germany plans to completely withdraw from nuclear power in 2022, and it is expected that wind power photovoltaic industry will continue to help Germany transform its energy structure in the future.
The US tariff policy is relaxed, and the pace of photovoltaic industry development is accelerated. In addition, the United States allows more clean energy projects to be deployed on public lands, and reduces the land cost of wind and solar projects by more than 50% to accelerate the goal of the new energy transition in the United States.
3. Strong demand for photovoltaic installations, and good competitive landscape for a long time
① Photovoltaic industry supply
In 2022, the supply of silicon materials will be tight, and the pace of new production capacity in the second half of the year will determine the upper limit of installed capacity. According to the production plans of some leading silicon material companies, the nominal production capacity of silicon materials will reach about 1 million tons by the end of 2022.
Considering that it will take 4-6 months to ramp up after the production of silicon materials, it is expected that the actual production will increase by 250,000 tons in 2022. ton, and the total global silicon material production reached 850,000 tons. Based on the current forecast of photovoltaic industry installed capacity demand in 2022, the supply of silicon material is still tight. After 2023, the bottleneck of silicon material supply will be opened, and the pace of expansion of supply and demand is expected to be consistent.
② Photovoltaic industry is improving, installed capacity in 2022 is expected to exceed expectations
It is expected that 2022 will be the year of photovoltaic industry growth, the market demand is expected to increase in the future, and the compound growth rate of newly installed photovoltaic industry capacity will remain high. Since 2015, the new installed capacity of photovoltaic industry in the world has grown rapidly. It is estimated that the new installed capacity of the DC side will be about 245GW in 2022.
The new installed capacity is expected to maintain the growth rate in the future, reaching nearly 450GW in 2025, with a 5-year compound growth rate of about 25%. It is expected that the driving force for the expansion of global photovoltaic industry demand in 2022 will come from important markets such as China, India, the United States, Europe, and Brazil. Driven by the carbon neutrality goal, countries around the world strongly support photovoltaic industry installations.
Recently, the European Union has set a target for photovoltaic industry installations in 2025, and the United States has exempted photovoltaic industry cell and module products from four Southeast Asian countries from tariffs, demonstrating the firm determination of several important market countries to develop photovoltaic industry. main force. In May, China added 6.83GW of newly installed photovoltaic industry capacity in a single month, an increase of 141% year-on-year, and an increase of 86% month-on-month.
From January to May, the cumulative installed photovoltaic industry capacity was 23.71GW, an increase of 139% year-on-year. In the follow-up, with the support of installed capacity demand from centralized ground power station projects such as large bases in China, it is expected that the prosperity of photovoltaic industry installed capacity will continue to remain high this year. China's module bidding demand continues to be strong, and the N-type premium is significantly affected by the grid connection time of centralized ground power station projects such as large bases.
In addition, the distributed demand is improving under the promotion of the whole county. Since 2022, the bidding demand has continued to be strong. According to the statistics of Gaishi Consulting, the cumulative module procurement in the first five months of 2022 reached 59.1GW, a year-on-year increase of 254%. There is a significant premium for N-type high-efficiency components.
The premiums of N-type modules in the four module bidding projects of SDIC, CNNC, Huadian, and SDIC are 0.107 RMB/W, 0.094 RMB/W, 0.038 RMB/W, and 0.141 RMB/W respectively. LONGi Green Energy, Jinko Solar, JA Solar, Trina Solar and other module integration manufacturers. The scale of EPC projects continues to grow, and centralized power plants occupy the mainstream EPC projects scale continues to grow, and the proportion of centralized power plants is at a high level.
The scale of photovoltaic industry EPC projects opened in the first five months of 2022 exceeded 36GW, and the scales from January to May were 5.03GW, 6.01GW, 7.79GW, 5.95GW, and 11.81GW, of which the EPC of centralized power plants accumulated in the first five months of 2022. accounted for 83%. The overall increase in global demand supports the high and stable export of modules, which is mainly due to the absence of tariffs in India and the strong demand in Europe.
According to relevant data, the export volume of photovoltaic industry modules from January to May 2022 was 68.6GW, a year-on-year increase of 93%. From January to May, the global demand for installed capacity increased rapidly. Except for February, which was affected by the Spring Festival holiday, the export scale and value of inverters increased significantly from January to May. The chain continues to grow. It is expected that the high global installed capacity demand will continue in the second half of the year, and the export of inverters is expected to maintain a high level.
4. Industrial chain: Stimulated demand, high operating rate of the industry
① Silicon material: strong terminal demand pushes up the price of silicon material
Silicon materials The PV boom in Q2 remained high, and strong demand continued to push up the price of silicon materials. Since January 2022, due to factors such as India’s tariff window period and rising demand in Europe, the demand for terminal installations has been strong, and the supply of silicon materials has been in short supply. The price has steadily risen to a high water level of 270 yuan/kg, and the price of silicon materials is expected to recover.
The operating rate remains high, but it is still not enough to meet demand, and the supply of silicon materials continues to be tight. In terms of supply, the increase in silicon materials in China in June includes new special technology reforms, expansion of sub-silicon production and other increments.
Downstream demand has continued to be strong since 2022, and due to the still considerable profitability of downstream silicon wafers, many companies oversubscribed orders for June in May, resulting in a significant reduction in the signable surplus in June, which to a certain extent aggravated the current situation of the shortage of silicon material supply, and the margin of net profit per ton increased.
② Silicon wafers: the operating rate remains high and the price transmission ability is strong
The cost conductivity of silicon wafer raw materials remains strong. The leading silicon wafer manufacturers have signed long-term orders for silicon materials to lock in the supply, and the cost transmission capacity remains strong. The price of 182 monocrystalline silicon wafers will remain stable after rising to 6.78 RMB/piece, the price of silicon wafers will be gradually lowered due to changes in supply and demand.
The operating rate of the silicon wafer segment rebounded, and the advantages of integrated companies were highlighted. The high downstream demand supports the rapid increase in the operating rate of silicon wafers. In June, the operating rate of integrated silicon wafers reached 87%, and the operating rate of specialization reached 80%. As the supply of silicon materials continues to be tight, leading silicon wafer companies with supply chain advantages have the right to speak out on price, and the cost of silicon wafers is relatively smooth and profitability is still considerable.
③ Battery: operating rate rebounded under the stimulation of demand, restored profitability
The clearance of outdated battery production capacity is accelerated, and the bargaining power is enhanced. Before 2022, due to the fragmented structure of the battery segment, the negotiating power for upstream and downstream is weak, the cost pressure transmission capacity is not strong, and the backward production capacity with poor profitability will be gradually discontinued and eliminated. In 2022, the bargaining power of the battery link will be significantly improved compared with the previous period, and the price transmission ability will be enhanced.
The operating rate rebounded under the stimulation of demand, and the leading integrated companies have outstanding advantages. The pattern of cell segments is scattered. Since 2022, it has been continuously stimulated by downstream demand, and the operating rate has rebounded significantly. Among them, the operating rate of leading integrated manufacturers is relatively stable due to the demand for downstream orders.
Orders for the battery segment are full, ushering in the restoration of profitability. Under the booming demand, battery manufacturers have full orders, and the profitability of a single battery segment has ushered in repairs.
④ Modules: the price of modules rose steadily, increased operating rate
The component part transmits the pressure of raw material cost, and the price rises steadily. In 2022H1, the terminal demand mainly comes from export and distribution. The module price is highly acceptable, and the strong demand supports the module price to reach 1.88-1.97 yuan/W. Recently, due to the high prices of raw materials such as upstream silicon materials and plastic films, module manufacturers have raised prices to transmit costs.
Modules are the last link of photovoltaic industry manufacturing, and high demand in 2022 will support the high operating rate of the industry. In 2022Q1, under the stimulation of demand, the operating rate of modules has rebounded significantly. It is expected that the strong demand for photovoltaic industry installations throughout the year is expected to continue, supporting the high operating rate of the module segment.
⑤ Inverter: high prosperity superimposed, the inverter industry set sail
The new market of energy storage is about to explode, and the development space of energy storage inverter is broad. According to CNESA data, the global electrochemical energy storage market is expected to add 8.37GW in 2021, a year-on-year increase of 77.8%, with a cumulative installed capacity of 22.6GW and an annual growth rate of 58.7%. By the end of 2025, the cumulative application scale of the global electrochemical energy storage market will be will be 138.6GW.
In the context of the rapid growth of the energy storage market, the demand for energy storage inverters has exploded, and there is a broad space for development. Driven by the U.S. and European markets, the global installed share of household energy storage will maintain rapid growth. The global installed capacity is expected to reach 20.16GWh in 2025, and the CAGR will reach 40% in 2021-2025. If you want to know more about inverter, please read the article Top 10 inverter battery best companies in the world in 2022 in our website.
⑥ Adhesive film: the competition pattern is stable, recover the gross profit margin
The market concentration of photovoltaic industry film is relatively high, and the leading enterprise Foster has a global market share of more than 50% for many consecutive years. Among the five leading companies in 2021, Foster's market share will account for about 57%. Benefiting from its advantages in financial strength, production capacity, technical process, raw material procurement, etc.
Foster has stronger profitability and comprehensive operational capabilities than other comparable companies, and its leading position is difficult to shake in the short term. Some second-line films The company's market share is expected to increase. The profitability of leading enterprises is dominant, and the overall gross profit margin is expected to rebound.
⑦ Glass: orderly expansion of production capacity, leading companies have profit advantage
Under the policy constraints, the production capacity will expand in an orderly manner, and the production capacity of the leading manufacturers will maintain a dominant position. It is expected that the photovoltaic industry glass industry will enter an orderly expansion stage under policy constraints in the future, and leading manufacturers are expected to continue to maintain their dominant position.
The gross profit margin of Follett's photovoltaic industry glass business in 2021 is 35.7%, which is similar to that of Xinyi Solar's photovoltaic industry glass business, which is also a leading manufacturer, and the gross profit gap with other companies is more than 10pct. The size of the furnace is leading and many other advantages have been accumulated. In 2022, the demand for installed capacity will increase, and it is expected to digest the new glass production capacity.
At the end of May 2022, the photovoltaic industry glass production capacity has reached 56,210t/d. With the release of market demand for photovoltaic industry installations in 2022, the demand for modules will exceed 240GW, and the double-glass penetration rate brought by new battery technology will increase. Based on the above two points, the growth rate of glass demand in 2022 is expected to exceed the growth rate of installed capacity. Considering Until the new production capacity has a climbing cycle, it is expected that the terminal demand in 2022 can smoothly digest the new production capacity of photovoltaic industry glass.
5. Battery technologies full bloom, cost reduction and efficiency increase expect to exceed expectations
① Efficiency improvement and cost reduction runs through the development of photovoltaic industry
From 2010 to 2020, the cost of solar PV above-scale has fallen by 85%, driven by continuous improvements in PV technology, economies of scale, supply chains and project development processes. The average power of photovoltaic industry modules has increased from 250-300W in 2010 to 400-550W in 2020, and is expected to increase to 800-1200W by 2030. The continuous improvement of photovoltaic module power needs to rely on the continuous development of photovoltaic industry technology.
Technological change is the biggest driving force for the reduction of photovoltaic industry cost and a key factor in determining the photoelectric conversion efficiency of cells. The photovoltaic industry chain includes silicon materials, pull rods, silicon wafers, cells and modules. The photovoltaic industry efficiency has improved significantly in the past ten years, which is inseparable from the common progress of technologies in all aspects of the photovoltaic industry chain.
These include the improved Siemens method in the silicon material section, the RCZ method in the single crystal rod pulling section, the diamond wire cutting method in the silicon wafer section, the PERC cell technology in the battery section, and the multi-busbar technology in the module section, etc. The current pace of technological progress is still Without stopping, technologies such as granular silicon, CCZ, and new batteries are expected to further drive the industry to reduce costs and increase efficiency. Among the many links in the photovoltaic industry chain, the battery link is the core of technological progress. The battery technology route determines the efficiency limit of photovoltaic industry products.
Monocrystalline PERC cells are an important turning point in the development history of photovoltaic industry technology, and have made important contributions to the realization of grid parity for photovoltaic industry power generation. With the continuous improvement of the mass production efficiency of PERC cells, its current efficiency has reached 23.5%, which is close to the theoretical efficiency limit of 24.5%. The industry urgently needs to develop a new generation of battery technology.
At present, new battery technologies are blooming. A strong contender for a new generation of new technologies. Future technology trends: Photovoltaic cells can be divided into crystalline silicon cells and thin-film cells according to material types; polycrystalline silicon cells and monocrystalline silicon cells according to crystal types; P-type cells and N-type cells according to doping types; The structure can be divided into BSF, PERC, TOPcon, HJT and IBC cells, etc.
N-type batteries: Higher minority carrier lifetime reduces electrical losses and leads the development of next-generation new technologies. Compared with P-type silicon wafers, solar cells based on N-type silicon wafers have many advantages in improving power generation efficiency. The theoretical efficiency limit of N-type cells is higher, and crystalline silicon cells can be divided into P-type cells and N-type cells according to different doping types.
At present, monocrystalline PERC has surpassed polycrystalline in terms of cost performance and efficiency, and has become the current mainstream battery technology. N-type battery market share is expected to continue to increase. Compared with P-type silicon wafers, N-type silicon wafers have many advantages. With the gradual improvement of the N-type silicon wafer process level, the popularization of the gettering process, and the gradual realization of large-scale TOPcon and HJT cells, the future market of N-type silicon wafers. The share is expected to continue to increase, and gradually realize the surpassing of the P-type market share.
IBC cell: no grid lines on the surface to reduce optical loss, can be superimposed with any new cell technology. The IBC structure can theoretically increase the photoelectric conversion efficiency by 0.6-0.7%. Taking a 10BB 182 PERC battery as an example, the width of the busbar is 0.1mm, the width of the thin grid is 30μm, and the shielding area of the grid is about 990 mm2, accounting for 2.9% of the total battery area. According to the calculation of the battery efficiency of 23.5%.
After the front grid lines are removed, the theoretical battery efficiency can be increased by 0.68%. Therefore, removing the front grid line can significantly reduce the optical loss and maximize the utilization of incident photons, which is an effective way to improve the photoelectric conversion efficiency. The IBC universal structure can be superimposed with any new battery technology.
IBC improves cell efficiency by transferring front-side grid lines, making it a versatile structure that can be superimposed with any new battery technology. IBC and TOPcon cells can be superimposed to form TBC cells, and HJT cells can be superimposed to form HBC cells. , and superimposed with the P-type PERC battery to form a PBC battery, which has a more significant effect of improving efficiency. IBC batteries have higher requirements on the matrix material and require higher minority carrier lifetime.
② Battery structure: the new battery structure determines the battery efficiency
The structure of photovoltaic cells is a key factor affecting cell efficiency in photovoltaic industry. The PN junction is the core of photovoltaic industry power generation, and the different film layers above and below the substrate play a role in improving the power generation efficiency according to different principles. Films commonly used in photovoltaic industry cells include silicon nitride film, aluminum oxide film, silicon dioxide film, amorphous silicon film, transparent conductive film, etc. Battery technologies such as PERC, TOPcon, HJT, and P-IBC achieve efficiency improvement by using different film layers.
Development of the structure of photovoltaic cells:
Basic structure: PN junction, which can form the most basic power generation unit.
BSF cell structure: PN junction + front silicon nitride film + back aluminum back field.
PERC cell structure: PN junction + front silicon nitride film + back aluminum oxide/silicon nitride.
TOPcon cell structure: PN junction + front aluminum oxide, silicon nitride + back silicon dioxide, doped polysilicon, aluminum oxide, silicon nitride.
HJT cell structure: substrate + front intrinsic hydrogenated amorphous silicon, P-type hydrogenated amorphous silicon, TCO + back intrinsic hydrogenated amorphous silicon, N-type hydrogenated amorphous silicon, TCO.
P-IBC cell structure: PN junction + front aluminum oxide, silicon nitride + rear silicon dioxide film, doped polysilicon (N), aluminum oxide, silicon nitride.
Production cost: Product cost-effectiveness determines the pace of production expansion Cost is a core consideration for enterprises when choosing a new technology route.
③ Various factors jointly determine the feasibility of mass production of new technologies
Expansion trend: TOPcon's production capacity will usher in a period of rapid volume growth. In 2022, TOPcon's volume will be the main focus, and new production capacity will give priority to N-type TOPcon battery technology. As a popular technology route, TOPcon batteries already have the cost-effectiveness of mass production, and will be the first to be mass-produced in 2022.
LONGi leads the development of P-IBC technology, and combines the advantages of upstream and downstream silicon wafers and components to form a P-IBC technology moat. P-IBC technology combines P-type TOPcon and IBC processes, and has higher requirements for upstream and downstream matching. On the one hand, it requires the use of high-body minority carrier life silicon wafers. The requirements for enterprise scale and R&D capabilities are relatively high, so other enterprises have certain difficulties in technology follow-up.
In the short term, TOPcon and P-IBC are expected to rapidly increase volume. In the long run, HJT will form a unified route to TOPcon. P-IBC technology is already cost-effective for production expansion. route.
④ Development of photovoltaic industry new technology routes
Short term: TOPcon, P-IBC develop together;
Long-term: HJT is expected to form a unified line
Application scenario: P-IBC is beautiful and efficient, suitable for distributed; TOPcon has a high double-sided ratio and is suitable for ground power stations.
P-IBC: With LONGi as the leading company, combined with P-type TOPcon and IBC processes, it has high requirements for upstream and downstream matching. On the one hand, it requires the use of high-body minority carrier life silicon wafers. The grid line has higher requirements on the scale and R&D capability of the integrated companies. Also, if you want to learn detailed information about photovoltaic battery companies, you could read the article Top 10 photovoltaic battery companies in the world in 2022 in our website.
TOPcon: With Jinko as the leading company, the process flow is relatively more mature. Mainstream companies such as LONGi, JA Solar, Trina, and Tongwei have technical reserves and layouts on TOPcon. As a popular technology route, TOPcon has already undergone experiments. The laboratory research and development and pilot stage verification are entering the stage of large-scale mass production.
At present, TOPcon and P-IBC technology have been cost-effective for production expansion, and the problem of high cost of HJT battery has yet to be solved.
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